In February, Freedom Chief Executive Burl Osborne told the Register and other company papers that some secured debt holders were selling their holdings and that Angelo Gordon was among the buyers.

“Angelo Gordon wasn’t a force to be dealt with when the reorganization plan was being put into place,” said Daniel Callahan of Santa Ana’s Callahan & Blaine, which represents newspaper carriers and other unsecured creditors. “It sounds like they’ve been a late entrant into the game.”

The firm has been buying up stakes in other distressed media companies, including the Philadelphia Inquirer and the Philadelphia Daily News.

A federal appeals court last month put a crimp in Angelo Gordon’s effort to buy the Philadelphia papers out of bankruptcy with a ruling favoring local owners currently in control.

The firm is appealing the ruling.

It’s also involved in a legal battle against Goldman Sachs Group Inc. over rival bids for Canadian broadcaster Canwest Global Com-munications Corp. Angelo Gordon teamed with New York-based Golden Tree Asset Management LP to vie for control of the media company’s debt, according to reports.

In Orange County, Angelo Gordon struck a deal last month to buy Santa Ana’s Griffin Towers office complex from Los Angeles-based Maguire Properties Inc.

Along with Dallas-based Lincoln Property Co., Angelo Gordon reportedly is buying the two 14-story buildings for a combined $90 million.

The buildings were valued at $200 million when Maguire refinanced the property in 2008.

Angelo Gordon executives believe the value of newspapers and other media have been pushed down too far in the downturn, according to a source familiar with the company’s thinking.

Some Angelo Gordon managers see signs that advertising revenue is rebounding, the source said.


That same optimism is displayed in Freedom’s reorganization plan.

The company’s rosy projection sees revenue going from $535 million in 2010 to $648 million by 2014.

Freedom’s hard-hit newspapers, led by the Register, are seen growing from nearly $398 million in 2010 revenue to $464.7 million in 2014.

The company projects an operating profit but expects to lose money on a net income basis this year and next with a net profit of $45.9 million in 2014.

Earnings before interest, taxes, depreciation and amortization—a profit measure favored by media companies—is projected at $61 million for 2010 and doubling to $123 million by 2014.

The numbers are pro forma and exclude results from a recently sold newspaper in Arizona and special charges.

Newspaper circulation, which has been in a long-running decline, is expected to remain essentially flat, according to bankruptcy documents.

The company hopes to offset declines in circulation through higher prices for advertisements, according to the filing.

Interactive revenue from Freedom’s Web sites is seen going from $41 million in 2010 revenue to $76.3 million in 2014.

Freedom’s cost cutting is expected to continue even as the company appears to be preparing to add workers. It’s projecting payroll and benefits to rise from $48.6 million this year to $60.3 million in 2014.

Industry analyst John Morton calls the projections “doable.”

Smaller Freedom newspapers should recover more quickly, he said. A larger paper such as the Register could be facing a sluggish rebound, according to Morton, who runs Morton Research Inc., based in Silver Spring, Md.

“As the largest newspaper in the chain, the biggest question mark could be how much of the Orange County Register’s classified advertising comes back,” Morton said. “There’s still debate in the industry over how much business newspapers can recover on a permanent basis.”